UK car manufacturing crumbled last month as demand ebbed away

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UK industry body blames Covid-19 for the result.

New figures show the number of cars built in UK car factories fell by almost 45 percent last month as demand crumbled at home and abroad. The Society of Motor Manufacturers and Traders (SMMT), which represents British car makers, blamed the drop on the coronavirus pandemic.

The organisation’s data showed just over 51,000 cars were built on these shores in August, down from more than 92,000 in the same month of 2019. That 44.6-percent drop came as domestic demand plummeted, while weak demand from abroad also kept factories quiet.

In total, demand from abroad – which made up around 80 percent of British output last August – fell by 41.1 percent, with just 43,244 cars built. However, the number of cars built for customers in the UK was down by 58.3 percent, with a pitiful 7,795 cars heading to customers on these shores.

More on the UK manufacturing industry since lockdown:

In mitigation, the SMMT points out that last August was a particularly strong month for the industry, with the threat of a no-deal Brexit causing plants to move their summer shutdowns from August to April in a bid to reduce disruption. That meant August 2019 saw output rise by just over three percent, although last month’s output was still down around 43 percent on August 2018.

The social distancing measures enforced at factories were perhaps a bigger factor, with staff forced to remain a safe distance from colleagues. This, the SMMT says, has meant production capacity has been diminished compared with pre-pandemic levels.

Nissan LEAF production in Sunderland, UK

Nevertheless, the news is a cruel blow for an industry beginning to show signs of recovery. Car production returned to around 80 percent of pre-pandemic levels in July, while that month saw van production rise when compared with the same period in 2019.

The statistic means the first eight months of 2020 have seen just over 518,000 cars leave British factory gates. That’s down from almost 867,000 during the same part of 2019 – a reduction of more than 40 percent. In part, that reduction has been caused by weak demand in foreign markets, and exports are down 38.8 percent, but the much smaller UK market has shrunk even more dramatically. Just 93,575 cars were built for British customers between January 1 and August 31, down 46 percent when compared with the 173,281 built by the same point in 2019.

SMMT chief executive Mike Hawes said the coronavirus crisis was wreaking havoc on the industry, and though the measures announced this week by Chancellor Rishi Sunak were welcomed, Hawes said the sector also needed the certainty of a free-trade deal with the EU.

“These are increasingly disturbing times for UK car makers and suppliers with the coronavirus crisis weighing heavily on the sector,” he said. “Companies are bracing for a second wave with tighter social and business restrictions making the industry’s attempts to restart even more challenging. The UK industry is fundamentally strong and agile, and the measures announced yesterday by the Chancellor are welcome and essential, although we await more details of how they will work for all businesses and crucially large manufacturers.

“Companies need to retain skilled jobs and maintain cashflow and we may need more support to boost business and consumer confidence later this year. Moreover, with fewer than 100 days until the Brexit transition period ends, we need urgent agreement of an ambitious free trade deal with our largest market to avoid the second shock of crippling tariffs.”

Bentley resumes production in Crewe

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